Casino owner concerned about gaming decline

SARATOGA SPRINGS >> An upstate casino owner says he’s greatly concerned about the possible addition of four large new facilities to an industry that’s already in the throes of a year-long slump.

Business at racetrack casinos across New York is down and Atlantic City’s $2.4 billion Revel Casino announced Tuesday that it will close next month, two years after opening, after failing to find a buyer in bankruptcy court – with the loss of 3,100 jobs.

Meanwhile, 16 firms have filed applications with the State of New York, seeking a license to run one of four full-scale casinos – two in the Hudson Valley/Catskills and one in each in the Capital Region and Finger Lakes/Southern Tier.

At least three of these would be new non-racetrack facilities, competing with existing racetrack casinos and dividing the Northeast gambling pie into even thinner slices.

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“I’m very concerned,” said Tioga and Vernon Downs harness track/racino owner Jeff Gural, who also owns Meadowlands Racetrack in New Jersey. “I think it’s (casino gambling) peaked. The number of people going to casinos has peaked. This year has been a turning point. Everywhere you go casinos are down, all over. It’s scary. If I was investing in casino stocks I’d really think twice.”

The week ending Aug. 9 was the 14th in a row that New York’s nine racetrack casinos combined suffered a decline in net win – revenues minus payouts – from last year, extending a slump that began nine months ago.

Gural was among the panelists who spoke at Albany Law School’s Saratoga Institute on Racing & Gaming at the Gideon Putnam Hotel on Wednesday.

Saratoga Casino & Raceway’s net win for June fell dramatically – $1.4 million from 2013 – but rebounded with a $200,000 gain in July and showed a modest increase for the first two weeks ending in August.

“Am I concerned? No,” said Rita Cox, senior vice president for marketing. “We still feel strongly that numbers are going to increase. The total amount (wagered) in the Northeast has actually gone up the past 10 years consistently.”

But as more casinos open, those dollars keep getting spread farther around.

Saratoga Casino & Raceway is one of four applicants seeking a new casino in the Capital Region, a proposed $300 million project in East Greenbush. Three other firms have submitted bids for Schenectady, Rensselaer and Howe Caverns in Schoharie County. An application for a casino in Amsterdam was ruled incomplete and disqualified.

The state is expected to announce the winning applications for each region this fall.

Many analysts blamed last winter’s harsh weather on the gaming downturn that began in late 2013. However, Gural said many bettors didn’t return when the weather got nicer.

“There’s a lot of things consumers have available to them right now for their entertainment dollars,” Cox said.

In addition, Gural said there might be an underlying change in demographics. Saratoga’s racetrack casino was the first in New York, which opened in January 2004. During the past decade, many casino patrons have been retired seniors with good pensions who had the money to wager with.

Now many Baby Boomers are retiring without strong pensions, giving them less disposable income than their parents, he said.

Also, Gural said people today are more health conscious.

“They don’t want to sit in front of a slot machine,” he said.

Gural is the only current racetrack casino owner in New York seeking a full-scale casino, at Tioga, between Binghamton and Rochester. Syracuse-based Wilmorite Management Group is one of the firm’s seeking a license for the same region, in Seneca County at Thruway Exit 41.

This $425 million proposed casino resort would have twice as many slots as Tioga – 2,000 versus 1,000 – and would cost considerably more than Gural’s $150 million expansion. However, he’s not anxious to over-invest, considering the performance of New York’s casinos in recent months.

“It’s a problem,” he said. “That’s why I’m not spending all that much money honestly.”